Is Amazon the next Apple?

Information is power. Exploiting information has created vast new enterprises. Google linked searching with advertising and took over the search engine market. Facebook connected people together in networks and advertised to them. Amazon started by selling books online. Now they sell almost anything online, including streaming movies and TV shows. Amazon made it easy to research and buy stuff online. I buy lots of stuff from Amazon: Computers, HDTV, Blu-ray, DVD, cameras, clothing, household maintenance items, specialty groceries, and more.

If you want to understand a consumer, look at what they buy. Google can’t do that. Facebook can’t do that. Amazon can.

It took me two seconds to order the Kindle Fire. Why? Because Amazon sells content and it has built a giga-warehouse of digital content. The device is secondary, which is why the Fire is so cheap. But, who is Amazon’s direct competition? I believe it is Apple.

Apple has done extremely well over the last decade. If you look at its revenue streams, you can see that its recent growth has come from just two products: IPhone and IPad. Amazon threatens the IPad market with the Fire. ITunes is relatively small revenue stream for Apple. It makes its money on the hardware.

Content is Amazon’s strength. It has the computer power to store and deliver huge volumes of content from the cloud. That puts Amazon in a position to challenge Apple. As hardware gets cheaper and better, Apple’s advantages will diminish. It might have leading edge hardware and zillions of apps, but the future is content: books, movies, TV shows, maybe games.